Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1887-01-07
Governors Message.
Gentlemen of the Senate and House OF Repre-

Gentlemen of the Senate and House OF Repre-
SIGNATURES.
In accordance with the duty enjoined upon
the Governor by the Constitution, l now sub
nit to YOU information of the condition OF
the State, and recommend to your consider
alton such measures as judge to be expedi-
ent at this time.
NV first recommendation is that the State
tax be reduced By the sum OF 3o,9f5.3o
which is 26s per cent of the total amount
now levied. The condition of the State
finances, according to the annual report OF
the Treasurer, will justify this important
step. The nominal amount of the bonded
debt of the State is So, l57 900, all of which
il due and payable in the year 1855, So
$50, 900 in June, and S2,S27 900 in October
In offset TO the total amount Of the debt,
there is in the treasury a sinking-fund or
s2,ll0,3 9O.57. This fund is composed OF
our own State Bonds to the amount OF ST.
l6l 800; United States Bonds, sS3f,3oo;
New Hampshire State Bonds. S92 600; and
Massachusetts, State Bonds, S2l.0O0 The
premium on the three last named securities
amounts, to-day according to the statement
of the Treasurer, to S241, 260.O0,-thus max
ing the aggregate value of the sinking-fund
100 ,OOu o. ut wiz P'No"S's
be higher, rather than lower during the
current year Deducting the sinking-fund
at its full and actual value, the aggregate
debt of the State which remains to be pro-
vided for is $3.50 S49.43
The sinking fund operations, under the
Act of 1868 should be brought to close,
now that the State is called upon to provide
for the final liquidation of the bonds in aid of
whose payment the fund was originally es-
tsblished. OF the securities in the fund, l
recommend that the bonds of our own State
be cancelled and destroyed by the Treasurer
in the presence of q joint committee of the
two branches of the legislature and com
mittee of the Executive Council. l recon-
mend further that the avails of the United
States, Massachusetts and New Hampshire
bonds be devoted directly to the liquidation
of the State debt, according to the manner
which is indicated below.
To provide for the State debt still remaining,
recommend that Refundi1g Bill be enacted,
giving the Treasurer the right to sell. aftes
due advertisement, to the highest bidder,
bonds of the State of Maine to an amount not
exceeding tw o million eight hundred thousand
dollars, the bonds to run for thirty years at
three per cent, interest to be paid semi
annually at the Treasurer's Office and in the
the ultimate redemption of these new bonds
a sinking-tund be established, amount.
ing to one per cent annually of the
whole amount, said sinking-tund to
be invested in State bonds of the New
England States, and city bonds of any New
England city of twenty thousand inhabitants
whose total permissible debt is not in ex-
cess of five per cent. of its valuation.
think a sinxinv-fund should not be so closely
restricted in the line of investments as to
practically defeat a large share of the profit
to be derived from its establishment. That
has been, to some extent the defect of the
sinking fund of 1868, as pointed out by the
Treasurer in his annual report. l recommend
only a small sinking fund for the new bonds,
one which, without burdening the taxpayer,
will rapidly extinguish the debI.
recommend further that a provision be
inserted in the Refunding Act, authorizing
the Treasurer to exchange the new bond for
the old at any time after the passage of the
Act, and further that the Treasurer be given
the right to purchase, to the extent of the
net amount remaining in the sinking fund,
all Maine bonds that may be offered in ad-
vance of their maturity, provided that the
terms of exchange and purchase shall be
obviously advantageous to the State These
authorizations to the Treasurer will probably
result in a considerable saving TO the treasury.
The exchange of bonds and the purchase of
bonds from the resources in the sinking fund
should be conducted with the knowledge and
the approval. in writing, of the Governor
the old bonds, in all cases. to be cancelled
and held as vouchers for the examination of
the next legislature.
The suspension of the interest on the
State bonds now held in the sinking fund,
together with the suspension of the $50, 900
annual contribution to that fund and the ter
mination of the $780, for direct payment of
State debt form the groundwor for the reduc-
ton of the State tax, as | have recommended.
With the successful reflndine of the State
debt and the provision for a new sinking fund
of one per cent, as recommended, a further
reduction of the State tax may be confidently
expected by the next Legislature.
The State tax to be levied this wear, after
the reduction referred to, will amount to two
and threequarters mills on the dollar of
State valuation, or wenty seven and one half
cents on each one hundred dollars. But it
must be noted that one mill of the two and
is not the ordinary State tax,
but is especially levied for the School fund.
Its aenefcent operation is such that the rich
towns of the State are held in part to educate
the children of the towns not so well of in
worldly goods. This tax is levied according
to property, and divided among the
towns according to the number of
scholars. so that the rich towns get back
great deal less than they pay, and the towns
of less wealth get back a great deal more
than they pay. This tax was established by
the legislature of 1872 and has worked we'll
Being levied directly by the State, it is often
confused with the State tax proper, which is
levied for the support of the State govern
ment in all its departments. Deiucting this
mill tax for schools, the State tax proper for
the ensuing year will be only one mill and
which is the lowest rate of
State tax for support of the government that
has been levied within the last fifty years,
with the exception of the tax levied respec-
lively by the legislatures of 1886, 1860 and
1861. The reduction now recommended re.
lates to the State tax proper, and amounts to
nearly thrty-seven per cent of the whole
amount levied.
These facts are encouraging to the
tax payers of the State and are In
the highest degree creditable to
the care and economy with which the State
finances have been administered in the past,
In 1868 the State debt was s., 100, 900, and
every dollar, except S699 900, was incurred
on account of the war for the suppression
of the rebellion. The payment of five mil
lion three hundred thousand dollars, which
has been made on the principal, leaves only
two million eight hundred thousand dollars
of the debt and will impose a tax for interest
of only S84, 900 per annum. If anything